Renting housing: what are the consequences of non-payment of tax?

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What is “illegal apartment rental” and the general situation in the rental real estate market
Consequences of illegal rental transactions
What to do if your neighbors rent out their housing illegally?
Responsibility for illegal renting of an apartment

Where to report the illegal rental of an apartment if there is reason to believe that neighbors are engaged in similar illegal activities? Citizens seeking to demonstrate consciousness need to know where to turn. Owners who prefer to engage in such “business” need to be prepared for the dangers and risks associated with illegal activity.

What is “illegal apartment rental” and the general situation in the rental real estate market

Illegal apartment rental is one of the most common problems in the residential and commercial real estate market today. Legal rental of housing requires compliance with the following rules regulated by the laws of the Russian Federation:

Payment by the owner of taxes on the income he receives from this transaction. Renting out real estate is a profitable business, and owners often do not want to share income with the state treasury. However, the laws of the Russian Federation define the rental of housing as one of the types of entrepreneurial activity and oblige the entrepreneur to pay 13% to the state budget.
Registration of the tenant on the meters of living space rented to him.

In case of illegal surrender, both rules are violated, which entails administrative and criminal liability on both sides. Such illegal entrepreneurship is aggravated by the fact that a foreign citizen lives in the rented premises.

Trends that can be observed in the rental property market:

The rental of luxury residential space almost always takes place within the law: the owners of such housing do not conduct illegal activities and regularly pay due payments to the state treasury.
Owners of economy-class housing, trying to reduce all kinds of expenses, conduct illegal activities, hiding the fact of their tenants’ residence.
About 80% of all concluded transactions for the rental of residential premises (usually economy class) are carried out illegally.

What is illegal renting of an apartment?

When concluding a legal lease transaction, the property owner pays a certain tax to the budget on the income received.

If the agreement has not been registered with the Federal Tax Service, and the obligation to pay taxes is ignored, then this activity is classified as illegal business activity - renting out an apartment.

However, when qualifying an act as illegal rental, the actions of the tenant also play a role. After execution of the contract, the tenant must register in the occupied space during his stay .
If these two procedures are ignored, it is worth saying that in this situation there is tax illegal rental of an apartment and the concealment of this information from inspection authorities, which actually reflects a violation of the law on both the side of the landlord and the tenant.

Consequences of illegal rental transactions

The situation when neighbors illegally rent out an apartment is very common in the Russian Federation. The circle of people involved in this “scam” (consciously or accidentally) faces a lot of risks and troubles. For example:

A home owner who rents it out without registering a business activity and without purchasing a patent is de facto breaking the law: hiding sources of income and evading taxes. For such a violation, a fine is imposed, at a minimum. Periodic raids by law enforcement agencies together with the tax police often identify lawbreakers. And if you rent out housing illegally, think about the consequences.
The tenant has practically no rights and is obliged to leave the apartment at the first request of the owner, since he is not protected by anything. There are absolutely no guarantees that the landlord will not “throw out” the tenant from the apartment a week after moving in. Where should a tenant complain in such a case? But nowhere, since he himself is to blame for this. Yes, an official deal will increase the rent by 10-15%, but if you unexpectedly have to change your place of residence (for example, due to the bad character of the apartment owner), then the services of a broker, moving and settling into a new place will cost many times more. A formal agreement gives the tenant confidence that his complaint in the event of the owner’s waywardness will be treated with full responsibility.
The remaining residents of the apartment building also suffer from such illegal transactions. Firstly, the tenants may turn out to be illegal migrants (consisting of 6-10 people), because of whom the neighbors can only dream of peace. Secondly, informal rentals allow tenants to engage in questionable activities, which also affects those who live nearby. Thirdly, many illegal residents allow themselves to be careless about the cleanliness and order of the entrance, since they are not responsible for this.

In such a situation, it is not surprising that many people have a desire to fight with neighbors who rent out residential space illegally. No one has the desire to pay for their neighbors’ financial ambitions with their own peace and comfort. In any situation, you can seek legal advice by phone free of charge.

Responsibility of the property owner for illegal rental

Various types of liability are provided for evasion of taxes on income that the owner receives from illegally renting out an apartment.

The primary punishment for an apartment owner who decides to earn extra money in this way will be a fine. It is imposed by the tax office.

Depending on the amount of damage caused by the illegal actions of the owner-lessor, he may also be subject to criminal liability.

How to file a collective complaint against neighbors?

What to do if your neighbors rent out their housing illegally?

What to do if neighbors rent out an apartment illegally? Where to complain? There are several options:

Try talking to the residents. If they make noise or otherwise cause discomfort, then it is worth explaining to them what the problem is.
Discuss the sensitive situation with the apartment owner.
Call the house manager and tell him about the current situation. He has the right to check the tenants' documents related to the rental transaction.
Contact the management company - housing cooperative or homeowners association. They are obliged to maintain order in the territory entrusted to them.
If tenants are very annoying with noise, you can contact the police department. Law enforcement officials will definitely detect the absence of relevant documents from residents.
Contact the local police officer - he will know exactly what to do when such signals are received. Firstly, he will visit the apartment and check the legality of the rental transaction. Secondly, if it turns out that the housing was rented out illegally, then the information will definitely go to the Federal Tax Service, and, if necessary, to the Federal Migration Service.
Write an application to the civil court.
Complain to the Federal Tax Service department. Inspection and increased attention to the homeowner - this will be the reaction of the tax authorities.
Contact the department of the Federal Migration Service. This will be appropriate if there are suspicions that the renters are illegal immigrants in the Russian Federation.

Where and how to report illegal rental of an apartment

You can leave a complaint to the management company, police department, migration service, Rospotrebnadzor. You can also send an appeal to the tax office. It is this authority that will be able to exert maximum influence on violators.

It is necessary to submit a complaint with a requirement to conduct an inspection and take measures established by law in writing. The complaint must include:

name of the body receiving the appeal;
applicant's passport details;
a detailed statement of the essence of the problem;
evidence of violation.

A collective complaint may be filed. In this case, neighbors who wish to participate must leave their passport and contact information, as well as sign the document being handed over.

Responsibility for illegal renting of an apartment

It is quite easy to avoid punishment for such illegal actions because:

It is very difficult to prove the fact of transfer of money to the owner. The owner always has some story in store that the residents are his relatives or good friends.
In order to punish a tenant for violating registration procedures, it is necessary to know the exact period of his residence in the given living space. If this information is missing, then you cannot count on justice.

And yet, those involved in such activities should know and remember that for illegally renting out an apartment they face a real prison sentence.

Documents required to prove unlawful rental of housing:

rental agreement signed by both parties;
receipts for receipt and transfer of funds;
act of acceptance and transfer of housing.

If both the landlord and the tenant are interested in ensuring that the listed documents do not fall into the hands of law enforcement agencies, then it is almost impossible to collect this list without their knowledge.

The law of the Russian Federation provides for both administrative and criminal liability for such illegal activities.

A fine for illegal rental of housing (administrative liability) can be imposed for:

intentional non-payment of tax (Article 122 of the Tax Code of the Russian Federation) - in the amount of 20-40% of the amount of the unpaid tax payment;
failure to submit a declaration (Article 119 of the Tax Code of the Russian Federation) - in the amount of 5% of the contribution for each month of delay, but not more than 30% and not less than a thousand rubles.

If violations of the NZ are expressed in non-payment of tax payments on a large scale (more than 600 thousand rubles over 3 years for citizens and 2 million rubles for legal entities), then criminal liability has been introduced (Articles 198, 199 of the Criminal Code of the Russian Federation), namely:

Fine. The owner will be required to pay from 100 to 300 thousand rubles if the tax debt exceeds 300 thousand rubles (Article 198 of the Criminal Code of the Russian Federation).
Forced labor. The duration of this punishment does not exceed 12 months.
Arrest for up to 6 months.
Imprisonment for up to 3 years. Such punishment is possible if the owner of the property received more than 1.5 million rubles per year for illegal rent.

In addition to the above, the landlord may also be charged with Art. 171 of the Criminal Code of the Russian Federation (illegal conduct of business activities). Every citizen needs to know where to complain if neighbors rent out housing illegally, and how to protect their rights. Every negligent landlord needs to be aware of the scale of responsibility for their actions. For any questions, you can get free legal advice by phone.

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What are the consequences of illegally renting out an apartment?

In order to bring the property owner to justice, you need to report the illegal rental of the apartment. However, in practice this is quite difficult to do, because the fact of transferring money to the owner is not recorded. Speaking of liability for the tenant, it is also not easy to prove the illegality of his actions, because for this you need to know the exact date from which the apartment is rented out.

If a person nevertheless manages to prove the fact and declare the illegal rental of an apartment, then the owner and tenants may be held liable for the following types of liability:

Criminal.
Administrative.

If illegal actions are proven, the owner faces a fine for illegally renting out the apartment. It makes up 20% of the total amount. In addition, he will additionally be required to pay tax for the entire duration of the transaction.

If the violation is committed by the owner of the property again, the fine for illegal renting of the apartment is doubled.
Tax authorities may also impose a fine for failure to provide information on income in an amount equal to 5 to 30% of the tax. As for criminal liability, it is imposed if tax arrears exceed 300 thousand rubles. Article 198 of the Criminal Code of the Russian Federation determines the fine for illegal renting of an apartment.

So, it can vary from 100,000 to 300,000 rubles, or by court decision, financial sanctions can be replaced:

Arrest (up to six months).
Involvement in forced labor (up to a year).

If a person receives a significant amount of money for renting out real estate, which, according to the legislator, should exceed 1.5 million rubles, then the lessor may be imprisoned for 3 years. Also, sanctions provided for in Article 171 of the Criminal Code of the Russian Federation may be applied to him.